Major shocks such as the coronavirus pandemic and the war in Ukraine affect all dimensions of well-being. How prepared is the Netherlands to withstand such a major shock in the short-term? Will people still have a means of livelihood, and how will the most vulnerable groups be affected? Will Dutch nature, and social and economic structures be strong enough to cope?
Well-being may also come under pressure in the longer term as a result of major external shocks that disrupt economies and societies.
The 2008 financial crisis, the coronavirus pandemic and the war in Ukraine have revealed the fragility of our way of life and the longer-term limits on the sustainability of well-being. Major external shocks like these affect all dimensions of well-being. We are not talking about the effects of current shocks in this respect, but about how prepared the Netherlands is to withstand such shocks in the future.
What is a shock?
In the context of well-being, a shock is an occasional event with major disruptive consequences for entire populations. Examples are wars, natural disasters, financial crises and pandemics. Shocks do not include medium- or long-term trends and transitions, that to a certain extent are foreseeable. Neither do they include regularly occurring events such as flu outbreaks, economic fluctuations or annual floods.
What is resilience?
Resilience is the ability of a society or system to reduce the risk of a shock, to absorb a shock when it occurs, to recover from it rapidly, and – where possible– to adapt systemically to the new post-shock situation.Interpretation
Resilience is not an absolute concept. There are no specific (Dutch) critical limits or standards against which indicator values can be measured. For example, monoculture makes agriculture vulnerable, but how much monoculture is acceptable, and how much is too much? As domestic natural gas extraction is being wound down, the Netherlands has become more dependent on imported natural gas, but at what level of import dependency should we start to worry? These are normative issues on which CBS expresses no opinion.
The role of the monitor is to present these issues together with facts on trends and changes. Data on resilience are interpreted only on a factual basis, without reflection on critical limits or standards. By their nature, these factual observations relate only to the present. How well the Netherlands will be able to absorb a shock, recover from it and adapt in the future can only be measured indirectly by examining the present state of relevant factors.
The indicators do not reflect the absolute level of resilience of well-being. The dashboard comprises a selection of key indicators that describe the phenomenon resilience. It shows whether the indicators for the six aspects of resilience are moving towards higher or lower resilience, and whether the Netherlands is more or less resilient than other EU countries.
The dashboard helps to identify potential weaknesses, which may be relevant in the event of future shocks. The more ‘green’ indicators, there are, the better society should be able to withstand such a shock.
Resilience of well-being ‘here and now’
Livelihood of households
Size of vulnerable groups
Robustness of the biosphere
Robustness of society
Robustness of the economy
Two themes in the resilience of well-being are related to well-being ‘here and now’. The theme ‘livelihood of households’ measures the extent to which households on average have the resources to withstand a shock. Here we look at median wealth, savings at banks in the Netherlands, the extent to which people are in control of their own lives, perception of own health, and labour participation. The theme ‘size of vulnerable groups’ focuses on certain vulnerable groups who would be the first to be impacted in the event of a shock: low-skilled people, the unemployed, self-employed people at risk of poverty, people with low income and little wealth, and people with long-term limitations due to health problems. See also resilience and well-being ‘here and now’.
Resilience of well-being ‘later’
Well-being ‘later’ concerns resources we pass on to future generations in the long term. The question here is whether the major systems that make our well-being possible – biosphere, society, economy – are robust enough to absorb major (external) shocks. In this connection, specific attention is devoted to government power, a particularly important aspect in the event of a shock affecting large sections of the population and threatening major systems.
Resilience of ‘critical systems’
Critical systems: system failure
Critical systems: essential for the three main systems
Critical systems: essential for society to function
Well-being ‘later’ also depends on the resilience of specific systems that are critical to well-being as a whole or to specific SDGs. We describe a system as critical if its failure could lead to the failure of other systems that are essential for the biosphere, society and/or economy, or that have a social function that is too important to be allowed to fail.
Systems whose failure could lead to the failure of other systems are energy supply, telecoms and information infrastructures. Ecosystems, social relations and the business community are essential for the resilience of the biosphere, society and the economy. Systems that fulfil an essential social function are the financial sector, government, care, education, transport and drinking water supply. See also Resilience and well-being ‘later’.
Resilience of well-being ‘elsewhere’
The theme ‘cross-border dependencies’ is related to well-being ‘elsewhere’ and comprises indicators describing dependence on energy imports, economic dependence on exports, and the greenhouse gas footprint.
Dependency on other countries represents a risk for well-being. The Netherlands is now largely dependent on foreign countries for its energy supply. In addition, essential products such as computers and mobile phones, but also solar panels and electric cars, contain rare and expensive metals. Demand for these scarce raw materials is high, and Dutch well-being will be at risk as long as the country does not itself have reserves of required raw materials and security of supply is not guaranteed, for example due to geopolitical tension. See also resilience and well-being‘; elsewhere’.